In a Competitive Market, the Actions of Any Single Buyer

question 96

Multiple Choice

In a competitive market, the actions of any single buyer or seller will

• A)discourage entry by competitors.
• B)influence the profits of other firms in the market.
• C)have a negligible impact on the market price.
• D)None of the above is correct.

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Definitions:

Two-part Tariff

A pricing strategy that involves a fixed charge plus a variable usage rate.

Marginal Profit

The increase in profit that results from selling one additional unit of a product.

Perfect Price Discrimination

A pricing strategy where a seller charges the maximum possible price for each unit consumed that buyers are willing to pay, capturing the entire consumer surplus.

First-degree Price Discrimination

A pricing strategy where a seller charges the maximum possible price for each unit consumed, tailored to the buyer's willingness to pay.